While Olympics business is steady, it looks like it's not setting any records and the first-quarter market isn't strong enough to tighten supply to the extent that non-NBC stations can raise their prices

What’s good for General Motors is good for the country, the company’s chief Charles Wilson famously pronounced in 1952, and today television stations would mournfully agree.

The news on Monday that GM is cutting its national advertising budget by $200 million—about 13% from 2005—is pretty scary considering the automaker was one of the leading national advertisers on the Winter Olympics in 2002, airing more than 200 spots on NBC alone.

While stations are not crying poverty over their 2006 Olympic bookings—no one is giving out exact figures—certainly there have been better Olympic environments. In 2002, the combination of an American site in Salt Lake City, a wave of post Sept. 11 patriotism and a more robust auto economy helped NBC realize $740 million in ad sales from the Olympics, of which 17% came from its owned-stations, MSNBC and the Internet, according to analyst estimates.

This year, NBC executives have publicly tabbed their take at $900 million, but with a much larger national cable and Internet presence than in 2002, it’s hard to say how the O&Os are doing. NBC refused to talk about its station ad sales for Turin.    

As of last week, media buyers were reporting NBC stations were holding prices to their normal Olympic premiums of around 50% —far more in some spots—but apparently are not sold out because the market broke late.

Mediavest Executive VP Anne Elkins says the stations still had inventory to sell. “They’ll probably call back next week after our money is spent and say, ‘We’ll drop our price,’ ” she says, half-jokingly, but making her point.


To be sure, business has been steady, the reps say, and they expect to sell enough Gold, Silver and Bronze packages to meet sales goals for the Olympics. Telecom and financial services remain strong, although fast food and retail are slumping.

Even in a decent Winter Olympics year, the first-quarter market is rarely strong enough to tighten supply to the extent that non-NBC stations can jack up their prices. But some suggest the market is unusually sluggish.

“There is ample inventory in the marketplace,” says Katz Television President Jim Beloyianis.

In some markets that supply-and-demand equation has encouraged more advertisers than usual to buy time against the Olympics, especially for “ambush” opportunities from sponsors with no official ties to the games.

“Unfortunately there is more inventory because of automotive being soft so it creates a softer market,” says a station sales executive.

This year, complications have piled upon complications. The market broke later than usual. While

Madison Avenue was ready to roll at the usual time, clients held back funds until early-mid December, largely due to the slow 2005 spot market.

“It probably gave a little more favorable pricing options to the market,” says one rep, who asked anonymity because he has NBC affiliate clients.

Also, the recent emergence of the new CW network has sent station executives scurrying to dissect the fallout. “It’s sort of impacted how people are doing their buys,” a station executive says.

Another drag has been NBC’s poor performance in primetime. That has created a secondary bear market at those affiliates.

Measuring national spot trends for the Winter Games can be tricky, according to stations, reps and media buyers who cite volatile market-by-market differences in viewer interest with climate as a major, but not sole driver, of viewer interest.

Of the 10 lowest-rated markets in 2002 for the wildly successful Salt Lake event, eight were located in the Sun Belt while only three warm weather climes finished in the top 10: the retirement meccas of Phoenix, Tampa, and West Palm Beach, Fla.

Elkins says she generally advises clients that are not in the Olympics to avoid advertising over that two-week period, “but that doesn’t hold true for every market. In some markets [the Olympics] don’t affect ratings on other stations.”

And it’s not just the Sun Belt. She refers to a Chicago study a few years back that showed little drop-off in non-Olympic station performance.

What does all of this mean to stations? Basically, people better start buying cars.

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